More on the Agency Workers Directive

1.     Government proposes to gold plate Agency Worker Directive 2.     ARC calls for delay in considering the Agency Workers Directive 3.     ARC membership 1.     Government proposes to gold plate Agency Worker Directive At Lawspeed’s seminar on 24th June Adrian Marlowe, Managing Director, explained that Government plans to implement the Agency Workers Directive go far beyond the intention of the EU Parliament. He said: “In common with most others, we had thought that the Directive requires the government to implement the legislation in the way proposed. However, closer inspection shows the government has disregarded the definitions and principles in the Directive that limit the scope of equal treatment. “The impression that the government is only acting in accordance with the Directive is a myth. The Directive does not apply to agency workers on assignment with the vast majority of average hirers, yet the government would have us believe that it does,…

Lawspeed seminar – Agency Workers Directive First

Lawspeed Seminar London – Agency Workers Directive First Consultation  To accommodate recruiters pressed for time and to reflect current economic constraints we have reduced the costs of this Agency Workers Directive seminar and it will also only be an afternoon session. Please see below for details. Speakers at this seminar will include: Jonathan Djanogly- Shadow Minister for BERR – Now BIS (Conservative) and Shadow Solicitor General Kieran Rossiter- Chief Financial Officer and Group Support Services Director, Premier Group This seminar is very important for recruiters. Although the Agency Workers Directive (AWD) may not be implemented this year, indications are that this piece of legislation is being given top priority by the government. Some have suggested that the legislation will have little impact, and recruiters need not be concerned. In our view nothing could be further from reality. A report following the REC’s Agency Summit last week shows that 61% of…

HMRC announces clampdown on expenses

HMRC have recently released Business Brief (50/09) announcing that they will be clamping down on expenses dispensations. Expenses benefits schemes are commonly used by umbrella companies or employment businesses to legitimately allow a worker to claim travel and subsistence whilst on assignment. However, it is feared such schemes are being abused. HMRC have indicated that they are currently investigating, and will be continuing to investigate, employment businesses and umbrella companies that are not compliant in these areas. Generally, only agencies that employ their workers on overarching employment contracts can allow expenses as gross paid to their agency workers. To prevent any investigation of your business, you should ensure that your employment contract is properly overarching and that all your processes in relation to expenses are compliant. Employment contracts appear to slowly be becoming more attractive for agencies to use with agency workers. There are a number of reasons for this…

Consultation on Agency Workers Directive published

The government has finally published (8th May 2009) its long awaited consultation on new rights for agency workers, following the Agency Worker’s Directive enacted in Europe in December 2008. Click here to view the consultation document and see subsequent articles in left hand column. The proposal is that agency workers should have “at least” the same pay, working and employment conditions as employees on the end user site. There is a legal requirement for the government to bring in legislation on this basis by no later than December 2011, but the government has vowed to introduce the UK legislation within the current Parliamentary Session, namely by the end of this year. The proposed new laws have the potential of being the single most damaging piece of legislation since the recruitment industry began, and the concept has been controversial from the outset. This now takes the number of current government consultations affecting…

Employment rights for contractors

Clients are becoming increasingly concerned about possible claims for employment rights from limited company contractors and temporary workers supplied through agencies. Evidence of this may be seen in agreements issued by clients that require the agency to provide indemnities against such claims. These indemnities are designed to cover all awards and costs incurred in the event that a contractor seeks compensation from the client for breach of alleged employment rights. The logic in this trend seems apparent but it does come at a time when those same clients want flexibility in their work force and when some clients are insisting upon margin reductions and rate cuts. Agencies should carefully consider the risks involved in agreeing to accept liability for employment rights. These risks are unlikely to be covered by any existing professional indemnity insurance policy. As an example, unfair dismissal can occur when a fixed term contract is not renewed.…

Lawspeed launches membership organisation

New membership body for the recruitment industry – ARC – vows to take proactive stance Visit: www.arc-org.net. As the economic downturn takes hold, and with a number of legislative measures and government proposals on the table that threaten to have a significant impact, now is the time when the recruitment sector needs strong industry representation the most. “That’s why”, says Adrian Marlowe, managing director of Lawspeed, a UK-based commercial and legal consultancy specialising in the recruitment business, “it is the right moment to launch the Association of Recruitment Consultancies” (ARC). Marlowe points to the impending legislation relating to the implementation of the Agency Workers Directive (AWD). “This is a key example why taking a more challenging approach to industry representation is necessary”. “The AWD is EU legislation that requires agencies to ensure agency workers receive the same basic employment conditions and pay as a person recruited directly at the end…

Government announces consultation

The Government has launched a consultation on the Conduct of Employment Agencies and Employment Businesses Regulations 2003 which could have a significant impact on the day-to-day business of recruitment companies. Whilst the document addresses some positive aspects, the principal area affecting supply recruiters is a proposal to remove the limited company opt out under regulation 32. The opt out has been widely used by many contractors including those operating through umbrella companies. It allows a significant benefit to supply recruiters wishing to avoid administrative procedures and to protect transfer fees since the fact of an opt out removes the need to comply with the Regulations. Although the proposals in the consultation are “dressed up” as trying to solve the problem of low skilled workers being pushed through umbrella companies, the practical effect of one of the proposals would be to remove the limited company opt out altogether. The consultation closes…

3 umbrella problems damage umbrella reputation

Following the recent news that JSA Services Limited, part of the JSA Group, owes £10.6 million to HMRC and has entered into a voluntary arrangement and that two other “umbrella service providers” have left contractors unpaid, agencies should take care to ensure they are protected against umbrella failures, says the recruitment law specialist Lawspeed. Adrian Marlowe, MD of Lawspeed and Chair of the recruiter trade body, the Association of Recruitment Consultancies, said “whilst agencies have quite rightly been focused on making sure they are not exposed to debt transfer arising under the Managed Services Legislation, it is just as, if not more, important for agencies to make sure that have a fall back position if the umbrella they are dealing with fails to pay the worker. Claims of compliance by an umbrella should not lull the agency into a sense of security – as recent events have shown that sense…

European Parliament votes to get rid of opt-out

The saga continues of the so called “deal”, under which the UK’s position opposing the Agency Workers Directive (AWD) was withdrawn in exchange for agreement  for the UK to retain the 48 hour opt out under the Working Time Directive (WTD.) On 17th December the EU Parliament made a determined attempt to remove the opt out by voting for its removal – in direct conflict with the alleged agreement. This could represent another nail in the coffin of the “deal” although it is important to emphasise that the position is not yet finalised and the Directive will now have to go to a conciliation procedure to decide its future.  Let’s recap. The parties to the “deal” which was announced on 20th May 2008 we are told were the CBI, for employers, and the TUC, for workers. The deal authorised the UK to change its opposition to the AWD, a position…

Pre budget report allows employment umbrellas off

The pre budget report contained the welcome news that the government has decided not to change the tax reliefs on travel expenses, but that is not the end of the matter. Adrian Marlowe, managing director of Lawspeed, said “this news will come as a huge relief not only to umbrella companies, but also to the large number of contractors for whom tax relief is a significant factor in accepting site based work. However this will not be the end of the matter as I am informed that the government will now set up a task force with greater emphasis on compliance and dispensations”. Adrian went on to say “we are very grateful for the tremendous support that was provided for the representation. It goes to show the value in providing a cohesive and coordinated strategy, and I hope that this continues. However, it is entirely possible that economic factors played…